On June 15, 2024, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $430 million. The expected completion date is April 1, 2026, just in time for the 2026 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): Costs incurred during the year Estimated costs to complete as of December 31 Required: 2024 $ 40 210 2024 1. Compute the revenue and gross profit that Sanderson will report in its 2024, 2025, and 2026 income statements related to this contract, assuming Sanderson recognizes revenue over time according to percentage of completion. 2. Compute the revenue and gross profit that Sanderson will report in its 2024, 2025, and 2026 income statements related to this contract, assuming this project does not qualify for revenue recognition over time. 3. Suppose the estimated costs to complete at the end of 2025 are $210 million instead of $140 million. Compute the amount of revenue and gross profit or loss to be recognized in 2025, assuming Sanderson recognizes revenue over time according to percentage of completion. $ 2025 $ 170 140 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the revenue and gross profit that Sanderson will report in its 2024, 2025, and 2026 income statements related to this contract, assuming Sanderson recognizes revenue over time according to percentage of completion. Note: Enter your answer in millions (i.e., $4,000,000 should be entered as $4). Loss amounts should be indicated with a minus sign. Use percentages as calculated and rounded in the table below to arrive at your final answer. 2026 $ 60 Percentages of completion 40 + = 0 Show less A
On June 15, 2024, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $430 million. The expected completion date is April 1, 2026, just in time for the 2026 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): Costs incurred during the year Estimated costs to complete as of December 31 Required: 2024 $ 40 210 2024 1. Compute the revenue and gross profit that Sanderson will report in its 2024, 2025, and 2026 income statements related to this contract, assuming Sanderson recognizes revenue over time according to percentage of completion. 2. Compute the revenue and gross profit that Sanderson will report in its 2024, 2025, and 2026 income statements related to this contract, assuming this project does not qualify for revenue recognition over time. 3. Suppose the estimated costs to complete at the end of 2025 are $210 million instead of $140 million. Compute the amount of revenue and gross profit or loss to be recognized in 2025, assuming Sanderson recognizes revenue over time according to percentage of completion. $ 2025 $ 170 140 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the revenue and gross profit that Sanderson will report in its 2024, 2025, and 2026 income statements related to this contract, assuming Sanderson recognizes revenue over time according to percentage of completion. Note: Enter your answer in millions (i.e., $4,000,000 should be entered as $4). Loss amounts should be indicated with a minus sign. Use percentages as calculated and rounded in the table below to arrive at your final answer. 2026 $ 60 Percentages of completion 40 + = 0 Show less A
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On June 15, 2024, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington,
D.C., for $430 million. The expected completion date is April 1, 2026, just in time for the 2026 baseball season. Costs incurred and
estimated costs to complete at year-end for the life of the contract are as follows ($ in millions):
Costs incurred during the year
Estimated costs to complete as of December
31
Required:
2024
Required 1 Required 2 Required 3
$ 40
210
1. Compute the revenue and gross profit that Sanderson will report in its 2024, 2025, and 2026 income statements related to this
contract, assuming Sanderson recognizes revenue over time according to percentage of completion.
2. Compute the revenue and gross profit that Sanderson will report in its 2024, 2025, and 2026 income statements related to this
contract, assuming this project does not qualify for revenue recognition over time.
3. Suppose the estimated costs to complete at the end of 2025 are $210 million instead of $140 million. Compute the amount of
revenue and gross profit or loss to be recognized in 2025, assuming Sanderson recognizes revenue over time according to
percentage of completion.
2024
2025
$ 170
140
Complete this question by entering your answers in the tabs below.
$
2026
$ 60
Compute the revenue and gross profit that Sanderson will report in its 2024, 2025, and 2026 income statements related to this contract,
assuming Sanderson recognizes revenue over time according to percentage of completion.
Note: Enter your answer in millions (i.e., $4,000,000 should be entered as $4). Loss amounts should be indicated with a minus sign. Use
percentages as calculated and rounded in the table below to arrive at your final answer.
Percentages of completion
40
+
0
Show less A
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